Simple, Logical Cause and Effect

Things have been fairly boring for the bond market recently.  We're in a holding pattern along with the Fed where the most abject threats from economic data have subsided, but where clear confirmation of lower rate momentum has yet to materialize.  Said confirmation could only come from consistently weaker economic data.  Inflation is the most important data, but the labor market is also always a consideration.  Today's labor market data involved the strongest weekly reading for jobless claims in well over a year.  Thankfully for fans of low rates, this data isn't a major market mover.  That said, it was a logical market mover today, immediately nudging yields up to new 5-week highs.

Econ Data / Events
    • Jobless Claims
      • 187k vs 207k f'cast, 203k prev
    • Philly Fed Index
      • -10.6 vs -7 f'cast, -12.8 prev
    • Building Permits
      • 1.495m vs 1.48m f'cast
    • Housing Starts
      • 1.46m vs 1.426m f'cast
Market Movement Recap
08:45 AM

sideways to a hair stronger overnight, but now weaker after data.  10yr up 1.7bps at 4.123. MBS down 3 ticks (.09)

11:44 AM

Some resilience after the 9:30am NYSE open, but back to weaker territory now.  10s up 3.2bps at 4.138.  MBS unchanged.

02:36 PM

Treasuries bounce back modestly, but still up 2.6bps on the day at 4.132.  MBS down only 1 tick (0.03).

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